Retirement Funds and Managed Portfolios
Almost everyone has, at one job or another, found herself or himself the owner of an IRA, 401(k) or similar managed retirement account. The best choice for you -- between Roth and traditional IRAs, and Roth and other forms of non-IRA accounts, such as 401(k)s -- is very personal, and deciding what that is demands a realistic approach.
First, you want to think about how much you want to contribute each year, which means being realistic about your income, your expenses and other savings strategies you're using. There are different caps and different rules for early withdrawal that come along with each kind of account, and you have to be serious about what your future plans are going to look like in order to make the right choice.
Finally, figuring out the duration of your savings, or how long until you retire and can begin drawing on the funds in the account, is important. A person starting his family in the first years of a career has different expectations than someone nearing the age of retirement with an already healthy savings and investment portfolio.
Remember, with financial planning, we go for a balance between "worst case scenario" and "best behavior." If you're too idealistic about your own abilities to save, you could end up with a bunch of fees and restrictions if you have to withdraw or transfer funds early or too frequently. Think too pessimistically in the planning stages, and you won't save as much as you could because you won't be living up to a higher standard of savings.